HMRC furlough fraud probe into mobile phone records ‘not automatic’

An alert to taxpayers that HMRC may probe their internet, phone and mobile call logs to help it prove furlough fraud might not be as unsettling at it sounds.

Featured in a tabloid, the alert stemmed from a law firm warning that a high number of calls from an employer to a furloughed employee could make HMRC think work was continuing.

If the employee did work when CJRS grants were being paid, it would constitute a breach of the scheme, as employers “cannot ask [staff] to do any work”, guidance on .gov states.

'Time, duration, location and number; all obtainable'

“HMRC can request data held by telecoms operators,” said the law firm -- RPC, “including the time, duration and location of a phone call, as well as the number dialled.”

Speaking to the Daily Express, the firm’s partner Adam Craggs also said that the department could request a list of websites visited by a taxpayer, from the taxpayer’s ISP.

But a tax dispute firm reassured yesterday that companies which used the Coronavirus Job Retention Scheme would not have their communications probed as a matter of course.

'This does not happen automatically'

“The access to taxpayers’ phone and internet records will be utilised by HMRC [only] in criminal cases, where there has already been a thorough risk assessment,” said Tax Resolute.

The firm’s Jesminara Rahman also told ContractorUK: “HMRC has to justify the reasons and go through various authoritative channels to be able to access these records. This does not happen automatically.”

Seeming to further lessen the immediacy of the taxman probing CJRS users’ communication logs, what is happening is “an exodus from HMRC of older and experienced officers.”

'Knock-on effect'

A former inspector also said: “It started in November and is ongoing now. It will cause a knock-on effect where new officers try to catch up on their own cases, while also getting to grips with cases previously dealt with by someone who’s left.”

Another former Revenue officer confirmed that the tax authority might have its work cut out – from retrieving tax payments from both CJRS users and parties caught by the new off-payroll rules.

“I wonder how HMRC think they are going to collect [overclaims or other revenue that they deem is due from their CJRS compliance checks].

“The same can be said of tax and NIC when it comes to implementing the new off-payroll rules from April – who is going to be able to afford to pay [given the poor financial position of many firms due to covid-19]?” 

The ex-inspector continued: “It seems that there will be loads of compliance cases going through all the motions, but the net result to HMRC will be less than zero. I would not want to be working these cases if I were still in the Revenue.”

'HMRC struggling'

At Tax Resolute, Ms Rahman attested to the difficulties for the department: “We enter 2021 in another lockdown with many [organisations] struggling -- including HMRC.

“[The Revenue] has closed down many offices and staff have left, leaving working cases being passed around and being reallocated.

She added: “HMRC has another four months of administering the coronavirus payments schemes, leaving HMRC again short on staff and resources.”